Final Word from Tuesday, June 28, 2011

Sanoma, Respekt and Chip showed off some beautiful iPad apps at an event of theUnion of Publishers last week and made a strong case for why tablets provide animproved reader experience. Jan Poštulka of OMD dampened the mood a bit whenhe declared that for now at least, iPad apps in the CR are mainly a matter of prestige,given the low penetration rate. Respekt's numbers revealed the sober truth -5,229 downloads of the application, and an average of 1,296 readers per week. Andso far it's free. GM Jaromír Skopalík of Bauer Media said after listening to the presentationsthat he fails to see the business model. Indeed, three things are holdingback the profit potential: The small number of devices (about 60,000 in the CR), the30% cut Apple takes (40% including VAT) and the natural limitations on global expansionimposed by the Czech language (10m speakers and going nowhere fast).

Glossary of difficult words

Will they scale? - a play on the expressions "will they sell?" and "will they achieve economies of scale?";

economies of scale - a proportionate saving in costs gained by an increased level of production;

to dampen - to make less strong or intense;

penetration rate - the percentage of users;

10m Czech speakers - plus of course 5m Slovaks (Chip said that 20% of its iPad app customers are from Slovakia).


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